Senator EDWARDS (South Australia) (11:42): I rise to talk about the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011. I cannot let the moment pass without reminding Senator Polley that we actually took our policies to all of our elections, unlike this current government, which seems to backflip.

Senator EDWARDS: This bill extends the operation of most provisions of the Fair Work Act 2009 to all of those contract outworkers in the textile, clothing and footwear industry—which I will refer to as the TCF industry—by deeming contract outworkers to be employees. It will provide a mechanism to enable TCF outworkers to recover unpaid amounts including those from contractors along the supply chain. It will facilitate a TCF outwork code. Not surprisingly, this bill will give additional powers to unions by extending specific rights of entry rules. Once again the Labor-Greens government have forced their way into another section of the community's homes. This creeping Orwellian government culture is consuming Australians.

Like other manufacturing industries the TCF industry has undergone transformation and structural adjustment. This is a consequence of tariff and industry assistance reforms beginning in the 1970s. With the Australian dollar currently so high in the TCF industry, whose export is now worth $1.7 billion a year, they need flexibility now more than ever. These businesses include new start-ups. As has often been the case in this industry, there are a lot of cottage start-ups coming through all the time—lots of imagination, lots of endeavour and lots of entrepreneurship. This kind of legislation that we see here in this bill will discourage the very entrepreneurship that I talk about and the risk-taking that is necessary for the industry to survive in this country.

Like many of Labor's policy forays, there has been limited consultation on this bill with those who are actually directly involved. This bill is another piece of legislation Labor are rushing through the parliament in order to satisfy their union cronies in their haste to gain more power in the Australian workplace in case this government collapses. There is a growing dominance by Labor of rushing legislation through this parliament, as we will see in just 14 minutes when they again guillotine another piece of legislation which has not been properly scrutinised.

Senator EDWARDS: The National Retailers Association is also particularly concerned, Senator Collins, with this bill. Echoing their concern, the Australian Chamber of Commerce and Industry, representing some 350,000 businesses nationwide, noted how this bill will make changes and the results of those changes:

The Bill makes complex and technical amendments to the Fair Work Act there 2009, some of which appears to result in changes which are not practical, will add costs throughout the supply chain and create uncertainty in existing commercial arrangements. We also find it extraordinary that the Government is proposing such changes without consulting key industry stakeholders and seemingly without regard for their impact on an industry already struggling to maintain a presence in Australia.

We have serious concerns that the amendments will inadvertently harm the very workers they seek to protect by restricting their ability to operate as independent and autonomous businesses. We believe that these amendments are responding to an outdated view of the industry, and that most of the workers this Bill seeks to protect do not see themselves as outworkers or employees, but as independent contractors working from home businesses.

Likewise, the Australian Industry Group states that the bill would:

… create a complicated web of laws for those in the textile, clothing and footwear (TCF) sector but furthermore the Bill is unbalanced and unfair on business.

I am drawn to repeat the phrase which Senator Fisher used earlier and say: what is it with Labor, that you take to industry with the vigour of a 'sledgehammer to a walnut'?

The Productivity Commission, in its final report on the review of the TCF assistance in June 2003, estimated that in 2003 not more than 25,000 people were working as outworkers in the TCF industry. For the same period, ABS data cited in the final report showed that around 58,000 people were directly employed in the industry. Using this data, the Productivity Commission came to the conclusion that outworker employment was about 40 per cent of total factory-based employment in the sector and exceeded factory-based clothing employment by about 25 per cent.

From this we can see that outworkers make up a significant proportion of those undertaking manufacturing work in the TCF sector. Ai Group goes on to state:

In circumstances where any business that operates in a supply chain which contains outworkers will find themselves legally liable for unpaid monies owed to those outworkers, it is conceivable that businesses will find this risk too great and either contractually prohibit the use of outworkers or cease manufacturing within Australia. Either scenario would be harmful to the Australian economy and the TCF sector.

This will export this country's jobs in conjunction with those jobs set to be lost due to the reckless and mindless carbon and mining taxes. The Labor Party has never seen an Australian success story that it does not want to tax, regulate or levy.

Under Labor's bill, union bully bosses will be able to come once again and extend their antiproductivity agenda into the Australian industry scene. The union movement is flexing its muscle here in parliament and forcing their backward vision upon the Australian economy. This bill comes at the same time that Labor has fundamentally undermined the construction industry by approving yesterday the abolition of the Australian Building and Construction Commission. This legislation appeases the left of the Labor Party in their ideological crusade that only damages Australia's productivity.

One of our most serious worries with Labor's bill is that the fair work agency will struggle to control the bullying union bosses when addressing complex issues in industries such as this. The Cole royal commission stands testament to what can happen when they take their eye off these union bullies. We must maintain our vigilance in the textile, clothing and footwear industry. This bill has the potential to enable the resurrection of misplaced union power and it will stifle Australian innovation and productivity gains in this highly competitive sector. True labour reform? Yes it is, with no view to the longer term sustainability of the clothing, textile and footwear industry.

When the coalition was in government we recognised the need for additional protections in the TCF industry and provided additional protections and safeguards. At the same time, the coalition also recognised the need for protections in the building and construction sector, leading to the establishment of the Australian Building and Construction Commission. Ah—but it is now all back to the future with this dysfunctional Gillard-Brown Labor government!

At present, one of the core arguments of the government in abolishing the ABCC is that it discriminates against certain workers and that the industrial relations regime should take a one-size-fits-all approach. This bill clearly defies Labor's view in relation to the ABCC. Convincing evidence of endemic and inappropriate conduct within workplaces in this industry has been presented in submissions to this inquiry. The coalition has had a strong track record of maintaining protections for outworkers in the textile, clothing and footwear industry in the various forms of workplace relations legislation between 1996 and 2007. With this reality central in our minds the coalition suspects that the government's central motivation for this amendment is to appease the trade union movement in the lead-up to the next federal election. The review of the Fair Work Act currently underway provides the best forum in which the provisions of this bill should be considered.

The coalition has received representations from many young and upcoming designers concerned about this bill. We support individual enterprise and innovation by those willing to take a risk to realise their potential. That is why we are concerned that genuine independent contractors or others could be unjustifiably covered and disadvantaged by this bill. The Council of Textile and Fashion Industries of Australia has outlined such examples, and we worry that independent innovators in this industry will be held back.

The Fair Work Act allows for individual flexibility arrangements—IFAs, as they are known to us—to be made, which they say meet the genuine needs of the employee and the employer subject to complying with certain requirements. These include that the employee must be better off overall under the IFA. This bill appears to deny access to IFAs for outworkers whether they be in the TCF industry or not—the term 'flexibility' must not allow the effect of those outworker terms to be varied. This is also despite the better-off-overall test which ensures that IFAs cannot undercut outworker terms.

There are serious concerns from textile suppliers that business and jobs in garment construction may continue to disappear off­shore as the textiles and accessories are outsourced in the locations where the work is undertaken. This bill claims to be for the benefit of the TCF industry and all that work in it but it may, in fact, end up shipping their jobs offshore. This bill represents another piece of policy failure from the Labor gov­ernment. It is another burden on enterprise, just as the carbon tax, mining tax and the Fair Work Act have made it harder to do business in Australia and to provide jobs for the broader Australian public. Labor is hell-bent on driving Australia's competitiveness into the ground. The party that is meant to represent working Australians is imple­menting policy that will destroy the jobs it is meant to be championing. It is for these reasons I cannot support the bill.